Growth in corporate profit will continue to drive price growth, but interest rate increases will hinder demand growth
Los Angeles, CA (PRWEB) September 13, 2014
The commodity price forecasting services market exhibits a buyer power score of 3.9 out of 5, which means the buyer has a slight upper hand in negotiations. “The high level of vendor competition and low switching costs boost buyer power, while the steadily rising price somewhat undermines it,” says IBISWorld business research analyst Dale Schmidt.
The market is highly fragmented, and the average buyer will have many suppliers to choose from. As a result, vendors compete strongly on price. In addition, buyers have substitutes services to choose from, namely in-house forecasting and forecasts that are available for free. While these are not perfect substitutes for outsourced forecasting services, they help drive prices down further. Also, the low switching costs help drive competition because buyers can quickly and easily find a new supplier. “Despite the strong competition, the average vendor is financially stable, which gives buyers an advantage because they do not need to worry about a supplier going under while still in a service contract,” says Schmidt.
Not all market factors favor the buyer, though. Steadily growing demand has caused prices to rise during the three years to 2014, which lowers buyer power. Suppliers have been able to raise rates because the service is infinitely reproducible for new clients at virtually zero marginal cost. As a result, prices move directly with demand. Price growth will remain limited, though, as interest rates begin to rise and drive demand away from commodities and toward more secure bonds. Major vendors include IHS Inc., the Economist Group and Deloitte Touche Tohmatsu. For more information, visit IBISWorld’s Commodity Price Forecasting Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of commodity price forecasting. Suppliers make statements about the price of commodities based on multiple variables including macroeconomic factors and other available statistics.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.